With almost 38 million broadband connections in the US, consumers now spend twice as much time on the Internet than watching television. While Forrester Research predicts greater than 12 percent annual growth in Internet marketing speeding in the next three years other experts expert growth rates of 100% and more as companies like Ford, McDonald’s, and Procter & Gamble announcing plans to direct a greater portion of their marketing budgets towards Internet advertising.
Because of these market conditions, content giants are eager to buy audiences. In 2005 the New York Times Co. paid $410 million in cash for About.com, InterActiveCorp acquired Ask Jeeves for $1.85 billion, News Corp. bought the parent company of MySpace for $580 million, in 2006 Google bought YouTube for $1.65 billion in stock, this year Microsoft bought a 1.6% stake in FaceBook fro $240 million.
Based on the recent high-profile Web content deals, the value of ‘eyeballs’ (or unique monthly website visitors) is approaching $100 (the average purchase price per unique user of acquisitions during the past 24 months). As a result, those who built popular websites over the last few years look prescient: They “bought” eyeballs when the market placed little value on them. Based on recent deals such as MySpace ($36 a pair), AskJeeves ($44 a pair), About.com ($22 a pair), MarketWatch ($80 a pair), and YouTube ($82) and FaceBook ($273) eyeballs are now worth $95 on average per pair.
Acquisition price per monthly unique visitor (logarithmic scale):
Ask Jeeves $44
Weblogs Inc. $10
Launch Media $6.60
Business 2.0 analysis